MANAGING DIRECTOR’S OPERATIONS REVIEW
Financial Review (FYE 20.2.2012)
AEON Credit Service (M) Berhad has recorded stronger annual business growth in the year ended 20
February 2012 compared to the previous year, from successful business
strategies deployed under an environment
of favourable market conditions.
Total revenue for the financial year of RM344.27 million
represented growth of 27.7% from previous year revenue of RM269.61 million.
This is attributable to growth in financing receivables achieved for credit
card operations, product Easy Payment schemes and Personal Financing scheme
during the year. Total transaction and
financing volume of RM1.66 billion for the year represented growth of 40.9% from the previous year.
Profit before tax (PBT) recorded for
the year of RM128.06 million 50.6%
higher than RM 85.02 million PBT in the previous year.
The financing
receivables as at end of FYE2012 was RM1.49 billion, representing growth of
34.5% from RM1.11 billion in the previous financial year. Meanwhile, non-performing loans (NPL) ratio was 1.80% as at
February 2012 compared to 1.83% in February 2011, reflecting satisfactory asset
quality management in spite of the sharp growth in business and receivables in the
year.
Increase in annual
operating costs in FYE 2012 by 17.3% is in tandem with business growth and
lower than revenue growth of 27.7%. The Company was able to record improved
margin of profit before tax against revenue for the year of 37.2% compared to
31.5% in the previous year due to
improved cost efficiency from sharp
growth in receivables in the year, lower ratio of net impairment loss charge
for the financial year against total financing receivables and reduced overhead
costs for depreciation and rental expenses. Average funding cost in February 2012 was lower marginally compared to
February 2011 due to new funding at competitive rates in the year from various
sources.
Other operating
income recorded of RM24.90 million for the year was 44.4% higher than
previous year. This is attributable to continued
growth in fee income, especially from
sales of insurance products, and increase in bad debts recovered.
Operational Review
Card Business
While 2011 was a challenging year for credit card issuers in
Malaysia to increase their customer base, the
Company’s principal credit cards in
circulation as at February 2012 had increased by 11.3% from the previous year based
on database marketing efforts, various promotions carried out and enhancement
of card benefits. Total credit card transactions volume of RM716.61 million represents
growth of 52.2% against the previous year, realised from both increase in card member
base as well as higher average card usage amount.
Meanwhile, the company introduced “EPF kiosks” located at all branches and AEON shopping malls to
attract increased walk-in consumer traffic and enhance opportunities for sales
and cross selling of financial service products offered by the Company
including credit cards and Personal Financing. The company will strive to convert more J-Card members to AEON credit card members and enhance card
benefits in collaboration with AEON Co. (M) Berhad to be a preferred credit
card among its customers in FYE2013.
Easy Payment and Personal Financing Business
The Easy Payment and Personal Financing schemes saw a 33.3% annual growth in financing volume
to RM940.12 million for the year under review. Database marketing activities
and attractive financing rates during the year served to increase transaction
volume significantly for personal financing operations, which registered 103.2%
annual growth in receivables against the previous year.
Further, the Company continued to obtain increasing volume of consumer credit applications from the
growing base of merchants for the consumer durables and motorcycle financing
operations during the year. The company continued to focus on growth in
business for larger financing amounts from the middle income consumers, both
for purchase of consumer goods and motor vehicles as well as personal financing needs.
Future Plans
The Company anticipates to be able to sustain growth in its financial performance in the
financial year ending 20 February 2013 based on its business strategies despite the lower economic growth rate forecast for 2012.
For the credit card operations, the Company intends to issue new cards targeted at the higher
income group consumers in FYE2013 while strengthening card recruitment
activities both at AEON shopping malls as well as through other marketing
channels.
Meanwhile, Easy Payment scheme operations will be expanded
to provide equipment and other asset
financing to small businesses . The Company shall expand the consumer durables financing scheme to
offer financing for personal services utilised by consumers. Financing for higher cubic capacity motorcycles and expansion of pre-owned car financing will continue to be an area
of focus as well as merchant network
expansion.
Additional branches
and service centres shall be opened nationwide by the Company in FYE 2013,
to facilitate greater market reach
to consumers, especially for personal
financing scheme operations and providing customer service.
Further, the Company shall
pursue growth in fee revenue from services in FYE2013, including sale of insurance products, to complement
income generation from receivables. The Company will focus on nationwide business expansion while
taking necessary action towards
sustainable business growth, maintaining prudent risk management policies and
healthy asset quality.
Acknowledgement
I would like to thank our customers, business partners and
shareholders for your continued support and confidence in the Company. I would
also like to express my sincere appreciation to the Board of Directors,
management and staff of the Company for your contributions and dedication,
which are essential for the future growth of the Company.
Yours sincerely,
Yasuhiro Kasai
Managing Director
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